U.K. Backtracks Controversial Crypto Data Collection Proposal

  • The rule, which was proposed last July, would have required all senders of crypto to collect the personal information of the recipient, even if they were using private wallets.
  • Her Majesty’s Treasury decided to not enforce the rule following the feedback it received on its consultation paper, which was also released last July.
Big Ben (Elizabeth Tower) stands at the north end of the Palace of Westminster

Big Ben (Elizabeth Tower) stands at the north end of the Palace of Westminster, the meeting place of House of Commons and House of Lords, London, United Kingdom, April 19, 2017. Shutterstock

The United Kingdom’s government has decided not to enforce its controversial rule that would require crypto senders to collect personal information on the receiver for every transaction, Her Majesty’s Treasury said in a document on 20 June.

According to the announcement, the decision was made based on the feedback the agency received since the release of the rule’s consultation document back in July. The original document noted that financial standards should be consistent across all financial services, including cryptocurrency, and as such data personal data should be collected even from private crypto wallets. The document from Monday reads:

“Instead of requiring the collection of beneficiary and originator information for all unhosted wallet transfers, crypto asset businesses will only be expected to collect this information for transactions identified as posing an elevated risk of illicit finance.”

The rule from last July was proposed under the Financial Action Task Force (FATF) standards, with the goal of preventing money laundering and terrorist financing. The now discarded proposal would have required the gathering of limited information for transfers below a certain threshold — the proposed amount was £1,000 — while anything above that would have required more personal information about the beneficiary.

If it was implemented, crypto asset firms would be required to gather personal information on both the originator and the beneficiary of each transaction. Individuals who wished to send any transaction between unhosted wallets would also have been required to gather know-your-customer (KYC) information on the receiver.

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